Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 23, Problem 23.21EX
Recording standards in accounts
Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the
a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit.
b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.
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Recording Standards in Accounts
Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions:
a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit. If an amount box does not require an entry, leave it blank.
a.
Materials
?
?
Direct Materials Price Variance
?
?
Accounts Payable
?
?
Feedback
Debit (unfavorable) or credit (favorable) the direct materials price variance.
Debit (unfavorable) or credit (favorable) the direct materials quantity variance.
b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner. If an amount box does not require an entry, leave it blank.
b.
Work in Process
?
?
Direct…
At the beginning of the year, Forest Corporation estimates overhead to be $175,000. If the actual overhead for the year is $165,000 and the applied overhead for the year is $120,000, what is the journal entry needed to reconcile the overhead variance? Assume that the overhead variance is immaterial.
a.
Cost of Goods Sold 45,000
Overhead Control 45,000
b.
Overhead Control 45,000
Cost of Goods Sold 45,000
c.
Cost of Goods Sold 15,000
Overhead Control 15,000
d.
Overhead Control 15,000
Cost of Goods Sold 15,000
e.
None of these
Recording Standards in Accounts
Cioffi Manufacturing Company incorporates standards in its
accounts and identifies variances at the time the
manufacturing costs are incurred. Journalize the entries to
record the following transactions:
a. Purchased 2,450 units of copper tubing on account at
$52.00 per unit. The standard price is $48.50 per unit. If
an amount box does not require an entry, leave it blank.
a.
b. Used 1,900 units of copper tubing in the process of
manufacturing 200 air conditioners. Ten units of copper
tubing are required, at standard, to produce one air
conditioner. If an amount box does not require an entry,
leave it blank.
88
b.
Chapter 23 Solutions
Accounting
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- 11. Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions. Refer to the Chart of Accounts for the correct wording of account titles. Mar. 1 Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit. 31 Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.arrow_forwardRobin Company records standard costs and variances in its accounts. Robin Company purchased and used 500 pounds of direct materials to produce a product with 520 pound standard direct materials requirement. The standard materials price is $1.90 per pound. The actual materials price was $2.00 per pound. a. Journalize the entry to record the purchase of the materials. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the materials used in production. If an amount box does not require an entry, leave it blank.arrow_forwardA company's standards for its product are 8 pounds of direct materials at $13.20 per pound. For this period, the company produced 3,240 units, using 26,520 pounds of direct materials costing $358,020. The company uses a standard costing system. Prepare the entry to record direct materials variances and charge direct material costs to Work in Process Inventory. View transaction list Journal entry worksheet < Record direct materials and charge direct material costs to Work in Process Inventory. Note: Enter debits before credits. Transaction 1 General Journal Work in process inventory Direct materials price variance Direct materials quantity variance Record entry Clear entry Debit 358,020 Credit View general journalarrow_forward
- At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.arrow_forwardYohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Unadjusted Cost of Goods Sold equals 1,500,000, unadjusted Work in Process equals 236,000, and unadjusted Finished Goods equals 180,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. What is the adjusted balance in Cost of Goods Sold after closing out the variances? 2. What if any ending balance in a variance account that exceeds 10,000 is considered material? Close the immaterial variance accounts to Cost of Goods Sold and prorate the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is 1,050,000, the prime cost in Work in Process is 165,200, and the prime cost in Finished Goods is 126,000. What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? (Round ratios to four significant digits. Round journal entries to the nearest dollar.)arrow_forwardJameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.arrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY